UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2008 or

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from               to

Commission File No. 0-13298

	MORGAN STANLEY CORNERSTONE FUND II L.P.

	(Exact name of registrant as specified in its charter)

          New York                                      13-3212871
(State or other jurisdiction of                 	  (I.R.S. Employer
incorporation or organization)                 	  Identification No.)

Demeter Management Corporation
522 Fifth Avenue, 13th Floor
New York, NY 						              10036
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code   (212) 296-1999







(Former name, former address, and former fiscal year, if changed since
last report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes    X        No


Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.  See the definitions of ?large accelerated filer?,
?accelerated filer? and ?smaller reporting company? in Rule 12b-2 of the
Exchange Act.

Large accelerated filer_______ 		Accelerated filer_______
Non-accelerated filer   X   		Smaller reporting company_______

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes ___  No  X



	<page> <table> MORGAN STANLEY CORNERSTONE FUND II L.P.

	INDEX TO QUARTERLY REPORT ON FORM 10-Q

	March 31, 2008

<caption>



PART I. FINANCIAL INFORMATION

				<c>
Item 1. Financial Statements

		Statements of Financial Condition as of March 31, 2008
		(Unaudited) and December 31, 2007 ......................... 2

		Statements of Operations for the Quarters Ended
		March 31, 2008 and 2007(Unaudited)..........................3

		Statements of Changes in Partners? Capital for the
		Quarters Ended March 31, 2008 and 2007 (Unaudited)..........4

		Statements of Cash Flows for the Quarters Ended
		March 31, 2008 and 2007 (Unaudited).........................5

		Condensed Schedules of Investments as of March 31, 2008
		(Unaudited) and December 31, 2007...........................6

		Notes to Financial Statements (Unaudited) ...............7-15

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations .......16-24

Item 3.	Quantitative and Qualitative Disclosures About
			Market Risk ........................................ 25-36

Item 4.	Controls and Procedures .............................36-37

Item 4T.	Controls and Procedures ................................37


PART II. OTHER INFORMATION

Item 1A.Risk Factors............................................38

Item 5.	Other Information....................................38-40

Item 6.	Exhibits................................................40


</table>


<page> <table> PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

	MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF FINANCIAL CONDITION
<caption>
	March 31, 	December 31,
	        2008        	        2007
	$	$
	(Unaudited)
ASSETS

	<c>	<c>
Trading Equity:
	Unrestricted cash	7,022,249	6,584,973
	Restricted cash	      142,332	        444,742

	     Total cash	    7,164,581	     7,029,715

	Net unrealized gain on open contracts (MS&Co.)	      244,004	        98,394

	     Total Trading Equity	7,408,585	 7,128,109

Interest receivable (MS&Co.)	               6,749	         15,021
Due from MS&Co.	                          2,639	          3,416

	     Total Assets	    7,417,973	    7,146,546

LIABILITIES AND PARTNERS' CAPITAL

Liabilities

Redemptions payable	141,593	92,051
Accrued administrative expenses	34,971	         30,222
Accrued management fees	         21,534	          20,756

   	    Total Liabilities	       198,098	        143,029

Partners? Capital

Limited Partners (1,923.070 and
   2,025.388 Units, respectively)	6,971,313	6,774,185
General Partner (68.567 Units)	                                             248,562                   	         229,332

	     Total Partners? Capital	    7,219,875	      7,003,517

	     Total Liabilities and Partners? Capital	    7,417,973	      7,146,546

NET ASSET VALUE PER UNIT	       3,625.10	                             3,344.64


<fn>


	The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table> 	MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF OPERATIONS
(Unaudited)

<caption>
  	   	     For the Quarters Ended March 31,


                                                                         		        2008    	      2007
                                                                               	                      $		          $

		<c>		<c>
INVESTMENT INCOME
	Interest income (MS&Co.)		    30,497			    86,211

EXPENSES
	Brokerage commissions (MS&Co.)		109,369	121,028
	Management fees 	   	62,521	73,745
	Common administrative expenses		9,000	12,000
	Transaction fees and costs		        5,900	      10,998

		Total Expenses		    186,790	    217,771

NET INVESTMENT LOSS	   (156,293)	    (131,560)

TRADING RESULTS
Trading gain (loss):
	Realized			581,786	(637,376)
	Net change in unrealized	      	     145,610	   (192,020)

   		 Total Trading Results		     727,396	   (829,396)

NET INCOME (LOSS) 	     571,103	    (960,956)

NET INCOME (LOSS) ALLOCATION

	Limited Partners                                                  		551,873	     (928,837)
	General Partner                                               	      	19,230	 (32,119)


NET INCOME (LOSS) PER UNIT

	Limited Partners                                                  		     280.46        	(375.35)
	General Partner    	                                               	280.46	(375.35)


	                                                                   Units     	                             Units
WEIGHTED AVERAGE NUMBER
	OF UNITS OUTSTANDING                          	   2,043.074		   2,559.456

<fn>


	The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table> MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
	For the Quarters Ended March 31, 2008 and 2007
	(Unaudited)

<caption>



			                                                         Units of
			                                                      Partnership	 Limited	     General
			                                                         Interest    	     Partners   	          Partner    	     Total
					$	      $	 $

			<c>	<c>	<c>	<c>
Partners? Capital,
   December 31, 2006	2,611.342	 8,722,240	295,488	9,017,728

Net Loss	?	(928,837)	(32,119)	(960,956)

Redemptions	    (102.058)	    (333,359)	            ?     	    (333,359)

Partners? Capital,
   March 31, 2007	  2,509.284	 7,460,044	  263,369	 7,723,413





Partners? Capital,
   December 31, 2007	2,093.955	 6,774,185	229,332	7,003,517

Net Income	?	  551,873	19,230	571,103

Redemptions	    (102.318)	    (354,745)	            ?     	    (354,745)

Partners? Capital,
   March 31, 2008	   1,991.637	 6,971,313	  248,562	 7,219,875






<fn>








The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table>	MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF CASH FLOWS
(Unaudited)


<caption>


				  For the Quarters Ended March 31,

				            2008      	      2007
				     $	$

			<c>	<c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	571,103	(960,956)
Noncash item included in net income (loss):
	Net change in unrealized	(145,610)	192,020

(Increase) decrease in operating assets:
	Restricted cash	302,410	(54,307)
	Interest receivable (MS&Co.)	8,272	2,535
	Due from MS&Co.	777	(28,405)

Increase (decrease) in operating liabilities:
	Accrued administrative expenses	4,749	                              555
	Accrued management fees	           778	         (3,751)

Net cash provided by (used for) operating activities	    742,479	     (852,309)


CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units	    (305,203)	    (321,639)

Net cash used for financing activities	    (305,203)	   (321,639)

Net increase (decrease) in unrestricted cash	437,276	(1,173,948)

Unrestricted cash at beginning of period	    6,584,973	   8,267,036

Unrestricted cash at end of period	     7,022,249	   7,093,088


<fn>






	The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table> MORGAN STANLEY CORNERSTONE FUND II L.P.
CONDENSED SCHEDULES OF INVESTMENTS
March 31, 2008 (Unaudited) and December 31, 2007

<caption>



Futures and Forward Contracts
       Long
   Unrealized
  Gain/(Loss)

Percentage of
   Net Assets
    Short
Unrealized
Gain/(Loss)

Percentage of
   Net Assets
        Net
   Unrealized
   Gain/(Loss)

$
%
$
%
   $

March 31, 2008, Partnership Net Assets:  $7,219,875





<c>
<c>
<c>
<c>
<c>
Commodity
           ?
            ?
           ?
            ?
            ?
Equity
         (5,600)
       (0.08)
      (7,649)
         (0.10)
 (13,249)
Foreign currency
        88,772
        1.23
  45,568
          0.63
 134,340
Interest rate
        32,907
        0.45
         ?
         ?
     32,907






     Grand Total:
      116,079
        1.60
     37,919
          0.53
    153,998

     Unrealized Currency Gain





     90,006

     Total Net Unrealized Gain



    244,004



     98,394


December 31, 2007, Partnership Net Assets:  $7,003,517









Commodity
         5,659
        0.08
  (1,460)
         (0.02)
     4,199
Equity
       17,639
        0.25
           (3,360)
         (0.05)
  14,279
Foreign currency
      (23,706)
       (0.34)
   (45,218)
         (0.65)
 (68,924)
Interest rate
       24,883
        0.36
    30,805
          0.44
     55,688






     Grand Total:
       24,475
        0.35
   (19,233)
         (0.28)
      5,242

     Unrealized Currency Gain





     93,152

     Total Net Unrealized Gain



     98,394










<fn>

The accompanying notes are an integral part
 of these financial statements.
</table>


<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Cornerstone Fund II L.P. (the "Partnership").
The financial statements and condensed notes herein should be read
in conjunction with the Partnership's December 31, 2007, Annual
Report on Form 10-K.

1.  Organization
Morgan Stanley Cornerstone Fund II L.P. is a New York limited
partnership organized in 1983 to engage in the speculative trading
of futures contracts, options on futures contracts, and forward
contracts on foreign currencies and other commodity interests
(collectively, "Futures Interests").  The Partnership is one of
the Morgan Stanley Cornerstone Funds, comprised of the
Partnership, Morgan Stanley Cornerstone Fund III L.P., and Morgan
Stanley Cornerstone Fund IV L.P.

The Partnership?s general partner is Demeter Management
Corporation ("Demeter"). The commodity brokers are Morgan Stanley
& Co. Incorporated ("MS&Co.") and Morgan Stanley & Co.
International plc ("MSIP").  MS&Co. also acts as the counterparty
on all trading of foreign currency forward contracts. MSIP  serves
as the commodity broker for trades on the London Metal Exchange.
Demeter, MS&Co., and MSIP are wholly-owned subsidiaries of Morgan
Stanley.  The trading managers to the Partnership are Northfield
Trading L.P. and John W. Henry & Company, Inc. (individually, a
"Trading Manager", or collectively, the "Trading Managers").

2.  Related Party Transactions
The Partnership's cash is on deposit with MS&Co. and MSIP in
futures, forward, and options trading accounts to meet margin
requirements as needed.  Monthly, MS&Co. pays the Partnership
interest income on 80% of its average daily Net Assets at a rate
equal to the average yield on 13-week U.S. Treasury bills. The
Partnership pays brokerage commissions to MS&Co.

3.  Income Taxes
No provision for income taxes has been made in the accompanying
financial statements, as partners are individually responsible
for reporting income or loss based upon their respective share of
the Partnership?s revenues or expenses for income tax purposes.
The Partnership files U.S. federal and state tax returns.  The
2004 through 2007 tax years generally remain subject to
examination by U.S. federal and most state tax authorities.



4.  Financial Instruments
The Partnership trades Futures Interests.  Futures and forwards
represent contracts for delayed delivery of an instrument at a
specified date and price.  Risk arises from changes in the value
of these contracts and the potential inability of counterparties
to perform under the terms of the contracts.  There are numerous
factors which may significantly influence the market value of
these contracts, including interest rate volatility.

The market value of exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect
to which market value is being determined.  If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated.  The
market value of off-exchange-traded contracts is based on the
fair market value quoted by the counterparty.

The Partnership?s contracts are accounted for on a trade-date
basis and marked to market on a daily basis.  The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No. 133").  SFAS No. 133 defines a derivative
as a financial instrument or other contract that has all three of
the following characteristics:

1)	One or more underlying notional amounts or payment
provisions;
2)	Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3)	Terms require or permit net settlement.

Generally, derivatives include futures, forward, swap or options
contracts, and other financial instruments with similar
characteristics such as caps, floors, and collars.

The net unrealized gains (losses) on open contracts, reported as a
component of "Trading Equity" on the Statements of Financial
Condition, and their longest contract maturities were as follows:

                 Net Unrealized Gains/(Losses)
                        On Open Contracts                 Longest Maturities

                Exchange-  Off-Exchange-             Exchange-  Off-Exchange-
Date             Traded      Traded        Total      Traded       Traded
                   $            $            $

Mar. 31, 2008	152,371	91,633	244,004	Dec. 2008	Jun. 2008
Dec. 31, 2007	160,568	(62,174)	 98,394	Dec. 2008	Mar. 2008

The Partnership has credit risk associated with counterparty non-
performance.  As of the date of the financial statements, the
credit risk associated with the instruments in which the
Partnership trades is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.




The Partnership also has credit risk because MS&Co. and MSIP act
as the futures commission merchants or the counterparties, with
respect to most of the Partnership?s assets. Exchange-traded
futures, exchange-traded forward, and exchange-traded futures-
styled options contracts are marked to market on a daily basis,
with variations in value settled on a daily basis. MS&Co. and
MSIP, each acting as a commodity broker for the Partnership?s
exchange-traded futures, exchange-traded forward, and exchange-
traded futures-styled options contracts, are required, pursuant to
regulations of the Commodity Futures Trading Commission ("CFTC"),
to segregate from their own assets, and for the sole benefit of
their commodity customers, all funds held by them with respect to
exchange-traded futures, exchange-traded forward, and exchange-
traded futures-styled options contracts, including an amount equal
to the net unrealized gains (losses) on all open exchange-traded
futures, exchange-traded forward, and exchange-traded futures-
styled options contracts, which funds, in the aggregate, totaled
$7,316,952 and $7,190,283 at March 31, 2008, and December 31,
2007, respectively. With respect to the Partnership?s off-

<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

exchange-traded forward currency contracts, there are no daily
settlements of variation in value, nor is there any requirement
that an amount equal to the net unrealized gains (losses) on such
contracts be segregated.  However, the Partnership is required to
meet margin requirements equal to the net unrealized loss on open
forward currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at MS&Co.  With respect to
those off-exchange-traded forward currency contracts, the
Partnership is at risk to the ability of MS&Co., the sole
counterparty on all such contracts, to perform. The Partnership
has a netting agreement with MS&Co. This agreement, which seeks to
reduce both the Partnership?s and MS&Co.?s exposure on off-
exchange-traded forward currency contracts, should materially
decrease the Partnership?s credit risk in the event of MS&Co.?s
bankruptcy or insolvency.

5.  New Accounting Developments
In September 2006, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
157 ("SFAS" 157"), "Fair Value Measurements".  SFAS 157 requires
use of a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three
levels: Level 1 - quoted market prices in active markets for

<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)



identical assets and liabilities; Level 2 - inputs other than
quoted market prices that are observable for the asset or
liability, either directly or indirectly (including quoted prices
for similar investments, interest rates, credit risk); and Level
3 - unobservable inputs for the asset or liability (including the
Partnership?s own assumptions used in determining the fair value
of investments).

Demeter evaluated the impact of adopting SFAS 157 on the
Partnership?s financial statements.  The Partnership adopted SFAS
157 as of January 1, 2008.  Based on its analysis, the effect of
applying SFAS 157 to the investments included in the financial
statements does not have a material impact on the Partnership?s
financial statements.

The following table summarizes the valuation of the Partnership?s
investments by the above SFAS 157 fair value hierarchy as of
March 31, 2008:
<table>



Assets
   Quoted Prices in
  Active Markets for
    Identical Assets
          (Level 1)
Significant Other
     Observable
         Inputs
       (Level 2)
Significant
  Unobservable
   Inputs
 (Level 3)




            Total


<c>
<c>
 <c>

<c>
Unrealized gain on open contracts
 $     152,371
    $   91,633
 n/a

 $  244,004
</table>




<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities ("SFAS 161").  SFAS
161 is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand how those
instruments and activities are accounted for; how and why they are
used; and their effects on a Partnership?s financial position,
financial performance, and cash flows.  SFAS 161 is effective for
financial statements issued for fiscal years beginning after
November 15, 2008, and interim periods within those fiscal years.
The Partnership is currently evaluating the impact that the
adoption of SFAS No. 161 will have on its financial statement
disclosures.

6.  Restricted and Unrestricted Cash
As reflected on the Partnership?s Statements of Financial
Condition, restricted cash equals the cash portion of assets on
deposit to meet margin requirements plus the cash required to
offset unrealized losses on foreign currency forwards and options
and offset losses on offset London Metal Exchange positions.  All
of these amounts are maintained separately.  Cash that is not
classified as restricted cash is therefore classified as
unrestricted cash.


<page>
MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

7.  Reclassification
Certain prior year amounts relating to cash balances were
reclassified on the Statements of Cash Flows to conform to 2008
presentation.  Such reclassification has no impact on the
Partnership?s reported net income (loss).




<page> Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

Liquidity.  The Partnership deposits its assets with MS&Co. and
MSIP as commodity brokers in separate futures, forward, and
options trading accounts established for each Trading Manager.
Such assets are used as margin to engage in trading and may be
used as margin solely for the Partnership?s trading. The assets
are held in either non-interest bearing bank accounts or in
securities and instruments permitted by the CFTC for investment of
customer segregated or secured funds.  Since the Partnership?s
sole purpose is to trade in futures, forwards, and options, it is
expected that the Partnership will continue to own such liquid
assets for margin purposes.

The Partnership?s investment in futures, forwards, and options
may, from time to time, be illiquid.  Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily limits".
Trades may not be executed at prices beyond the daily limit.  If
the price for a particular futures or options contract has
increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit.  Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading.  These market conditions could prevent the Partnership
<page> from promptly liquidating its futures or options contracts
and result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies.  The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses.  Either of these market conditions could
result in restrictions on redemptions.  For the periods covered by
this report, illiquidity has not materially affected the
Partnership?s assets.

There are no known material trends, demands, commitments, events,
or uncertainties at the present time that are reasonably likely to
result in the Partnership?s liquidity increasing or decreasing in
any material way.

Capital Resources.  The Partnership does not have, nor does it
expect to have, any capital assets.  Redemptions of units of
limited partnership interest ("Unit(s)") in the future will affect
the amount of funds available for investments in futures,
forwards, and options in subsequent periods. It is not possible to
estimate the amount, and therefore the impact, of future outflows
of Units.

<page> There are no known material trends, favorable or
unfavorable, that would affect, nor any expected material changes
to, the Partnership?s capital resource arrangements at the present
time.

Off-Balance Sheet Arrangements and Contractual Obligations.  The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

Results of Operations
General.  The Partnership?s results depend on the Trading Managers
and the ability of each Trading Manager?s trading program to take
advantage of price movements in the futures, forward, and options
markets.  The following presents a summary of the Partnership?s
operations for the three month periods ended March 31, 2008, and
2007, and a general discussion of its trading activities during
each period.  It is important to note, however, that the Trading
Managers trade in various markets at different times and that
prior activity in a particular market does not mean that such
market will be actively traded by the Trading Managers or will be
profitable in the future. Consequently, the results of operations
of the Partnership are difficult to discuss other than in the
context of the Trading Managers? trading activities on behalf of
the Partnership during the period in question. Past performance is
no guarantee of future results.
<page> The Partnership?s results of operations set forth in the
financial statements on pages 2 through 15 of this report are
prepared in accordance with accounting principles generally
accepted in the United States of America, which require the use of
certain accounting policies that affect the amounts reported in
these financial statements, including the following:  The
contracts the Partnership trades are accounted for on a trade-date
basis and marked to market on a daily basis.  The difference
between their cost and market value is recorded on the Statements
of Operations as "Net change in unrealized trading gain (loss)"
for open (unrealized) contracts, and recorded as "Realized trading
gain (loss)" when open positions are closed out.  The sum of these
amounts constitutes the Partnership?s trading results.  The market
value of a futures contract is the settlement price on the
exchange on which that futures contract is traded on a particular
day. The value of a foreign currency forward contract is based on
the spot rate as of the close of business.  Interest income, as
well as management fees, incentive fees, brokerage commissions,
and transaction fees and costs of the Partnership are recorded on
an accrual basis.

Demeter believes that, based on the nature of the operations of
the Partnership, no assumptions relating to the application of
critical accounting policies other than those presently used
could reasonably affect reported amounts.

<page> For the Quarter Ended March 31, 2008
The Partnership recorded total trading results including interest
income totaling $757,893 and expenses totaling $186,790
resulting in net income of $571,103 for the quarter ended March
31, 2008. The Partnership?s net asset value per Unit increased
from $3,344.64 at December 31, 2007, to $3,625.10 at March 31,
2008.

The most significant trading gains of approximately 7.4% were
recorded in the currency sector during February from long
positions in the euro, Swiss franc, Chilean peso, and Japanese
yen versus the U.S. dollar as the value of the U.S. dollar moved
lower against its major rivals after weaker-than-expected
manufacturing data from the Federal Reserve Bank of Philadelphia
reignited fears of an economic slowdown in the U.S.  In addition,
the value of the U.S. dollar continued to decline after U.S.
government reports showed a rise in unemployment and slower-than-
expected fourth quarter 2007 Gross Domestic Product growth.
During March, the value of the U.S. dollar continued to decline
following news of weaker-than-expected U.S. retail sales, and
U.S. consumer confidence at a 16-year low. Lastly, the value of
the U.S. dollar was pulled lower due to several interest rate
cuts by the U.S. Federal Reserve, as well as indications that
interest rates might continue to decline. Elsewhere in the
currency sector, smaller gains were recorded from short positions
in the South African rand versus the U.S. dollar as the value of
<page> the South African rand moved lower throughout the quarter
on pessimism about the long-term status of the South African
economy. Additional gains of approximately 1.2% were experienced
in the global stock index sector during January from short
positions in European stock index futures as prices moved lower
on concerns that a persistent U.S. housing slump, mounting losses
linked to U.S. sub-prime mortgage investments, and a weakening
job market might restrain consumer spending. Prices continued to
move lower during March after companies reported weaker-than-
expected earnings due to a slowing global economy and further
losses related to the collapse of the U.S. sub-prime mortgage
market. Smaller gains of approximately 0.1% were achieved in the
global interest rate sector primarily during January from long
positions in Japanese fixed-income futures as prices increased
amid stronger demand, following a sharp decline in global equity
markets and concerns that a possible economic recession in the
United States might weaken the global economy. Prices continued
to move higher in March amid continued weakness in the global
equity markets and news of continued corporate losses, which
spurred demand for the relative ?safety? of government bonds.
Furthermore, prices of Japanese fixed-income futures increased on
speculation that the Bank of Japan would cut interest rates this
year.



<page> For the Quarter Ended March 31, 2007
The Partnership recorded total trading results including interest
income totaling $(743,185) and expenses totaling $217,771,
resulting in a net loss of $960,956 for the quarter ended March
31, 2007. The Partnership?s net asset value per Unit decreased
from $3,453.29 at December 31, 2006, to $3,077.94 at March 31,
2007.

The most significant trading losses of approximately 8.6% were
recorded in the currency sector during January from both short
and long positions in the South African rand versus the U.S.
dollar as the value of the South African rand moved without
consistent direction due to conflicting economic data out of
South Africa.  Further losses were recorded from short positions
in the South African rand versus the U.S. dollar during March as
the value of the South African rand reversed sharply higher
relative to the U.S. dollar on expectations that increased demand
for South Africa?s exports would significantly improve the South
African economy.  Elsewhere in the currency markets, losses were
recorded during January from long positions in the Australian
dollar and New Zealand dollar versus the U.S. dollar as the value
of the U.S. dollar strengthened against these currencies after a
government report showed that U.S. job growth had been
unexpectedly higher during December 2006.  Short positions in the
New Zealand dollar versus the U.S. dollar resulted in further
losses during February as the value of the New Zealand dollar
<page> reversed higher amid speculation that the Reserve Bank of
New Zealand would increase its benchmark interest rate in the
near term.  Losses were also recorded during March from both
short and long positions in the Australian dollar versus the U.S.
dollar as the value of the Australian dollar moved without
consistent direction due to uncertainty regarding the future
interest rate policy of the Reserve Bank of Australia.  Elsewhere
in the currency markets, long positions in the British pound
versus the U.S. dollar experienced losses during February as the
value of the British pound weakened against the U.S. dollar after
a report showed U.K. services growth had slowed in January.
Further losses were incurred during March from newly established
short positions in the British pound versus the U.S. dollar as
the value of the British pound moved higher.  Smaller losses were
experienced from short positions in the Mexican peso versus the
U.S. dollar as the Mexican peso strengthened on increased
speculation of an interest rate hike from the Bank of Mexico.
Additional losses of approximately 2.7% were incurred in the
global stock index sector during January from long positions in
U.S. and Pacific Rim equity index futures as prices weakened due
to profit-taking.  Further losses were experienced during
February from long positions in U.S., Pacific Rim, and European
stock index futures as prices reversed sharply lower after a
massive sell-off in the global equity markets that began on
February 27, 2007, following comments from former U.S. Federal
<page> Reserve Chairman Alan Greenspan that the U.S. economy
could be due for a recession.  Furthermore, concerns that tighter
credit conditions in China and Japan might dampen global growth
first sent Chinese stock markets plunging before the sell-off
spread to other equity markets.  Losses were also experienced
during March from newly established short positions in U.S.,
Pacific Rim, and European equity index futures as prices drifted
higher on investor sentiment that global markets had been ?over-
sold? in prior weeks.  Smaller losses of approximately 0.7% were
recorded in the global interest rate sector primarily during
February from short positions in German and U.S. fixed-income
futures as prices reversed higher in a ?flight-to-quality? after
the aforementioned significant sell-off in the global equity
markets.  During March, newly established long positions in
German and U.S. interest rate futures incurred losses as prices
moved lower later in the month amid reduced demand for the ?safe
haven? of fixed-income investments after the stabilization of the
global equity markets. Furthermore, German interest rate futures
were pressured lower on strong economic data out of Germany,
while U.S. interest rate prices declined after a stronger-than-
expected government jobs report.





<page>
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options.  The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership?s assets are at risk of
trading loss.  Unlike an operating company, the risk of market-
sensitive instruments is inherent to the primary business activity
of the Partnership.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk.  Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities, factors that result in frequent
changes in the fair value of the Partnership?s open positions,
and consequently in its earnings, whether realized or unrealized,
and cash flow.  Gains and losses on open positions of exchange-
traded futures, exchange-traded forward, and exchange-traded
futures-styled options contracts are settled daily through
variation margin.  Gains and losses on off-exchange-traded
forward currency contracts are settled upon termination of the
contract.  However, the Partnership is required to meet margin
requirements equal to the net unrealized loss on open forward
currency contracts in the Partnership accounts with the <page>
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at MS&Co.

The Partnership?s total market risk may increase or decrease as
it is influenced by a wide variety of factors, including, but not
limited to, the diversification among the Partnership?s open
positions, the volatility present within the markets, and the
liquidity of the markets.

The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements.  Margin requirements generally range between 2% and
15% of contract face value.  Additionally, the use of leverage
causes the face value of the market sector instruments held by
the Partnership typically to be many times the total
capitalization of the Partnership.

The Partnership?s past performance is no guarantee of its future
results.  Any attempt to numerically quantify the Partnership?s
market risk is limited by the uncertainty of its speculative
trading.  The Partnership?s speculative trading and use of
leverage may cause future losses and volatility (i.e., "risk of
ruin") that far exceed the Partnership?s experiences to date
under the "Partnership?s Value at Risk in Different Market
Sectors" section and significantly exceed the Value at Risk
("VaR") tables disclosed.
<page> Limited partners will not be liable for losses exceeding
the current net asset value of their investment.

Quantifying the Partnership?s Trading Value at Risk
The following quantitative disclosures regarding the Partnership?s
market risk exposures contain "forward-looking statements" within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934).  All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounts for open positions on the basis of mark
to market accounting principles.  Any loss in the market value of
the Partnership?s open positions is directly reflected in the
Partnership?s earnings and cash flow.

The Partnership?s risk exposure in the market sectors traded by
the Trading Managers is estimated below in terms of VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio.  The VaR model takes into account
linear exposures to risk including equity and commodity prices,
interest rates, foreign exchange rates, and correlation among
<page> these variables. The hypothetical changes in portfolio
value are based on daily percentage changes observed in key market
indices or other market factors ("market risk factors") to which
the portfolio is sensitive.  The one-day 99% confidence level of
the Partnership?s VaR corresponds to the negative change in
portfolio value that, based on observed market risk factors, would
have been exceeded once in 100 trading days, or one day in 100.
VaR typically does not represent the worst case outcome.
Demeter uses approximately four years of daily market data (1,000
observations) and re-values its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over this time period.  This generates a probability
distribution of daily "simulated profit and loss" outcomes.  The
VaR is the appropriate percentile of this distribution.  For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter?s simulated profit and loss series.

The Partnership?s VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership?s, are continually evolving
as trading portfolios become more diverse and modeling techniques
and systems capabilities improve.  Please note that the VaR model
<page> is used to numerically quantify market risk for historic
reporting purposes only and is not utilized by either Demeter or
the Trading Managers in their daily risk management activities.
Please further note that VaR as described above may not be
comparable to similarly-titled measures used by other entities.

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at March 31, 2008, and 2007. At
March 31, 2008, and 2007, the Partnership?s total capitalization
was approximately $7 million and $8 million, respectively.

Primary Market            March 31, 2008      March 31, 2007
Risk Category             Value at Risk        Value at Risk

Currency	       (1.17)% 	 (2.94)%

Interest Rate	(0.23)	     (0.61)

Equity	(0.11)	(0.31)

Commodity	             -	(0.25)

Aggregate Value at Risk	    (1.31)%  	(2.84)%


The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category.  The Aggregate Value at Risk listed above represents
the VaR of the Partnership?s open positions across all the market
categories, and is less than the sum of the VaRs for all such
market categories due to the diversification benefit across asset
classes.
<page> Because the business of the Partnership is the speculative
trading of futures, forwards, and options, the composition of its
trading portfolio can change significantly over any given time
period, or even within a single trading day.  Such changes could
positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the quarter-end VaR set forth above
by presenting the Partnership?s high, low, and average VaR, as a
percentage of total Net Assets for the four quarter-end reporting
periods from April 1, 2007, through March 31, 2008.

The Partnership?s low VaR, as a percentage of total Net Assets
for the four quarter-end reporting periods from April 1, 2007,
through March 31, 2008, is zero for the commodity market risk
category as there was no open position in the Partnership at
March 31, 2008.

Primary Market Risk Category	High	     Low	     Average
Currency	(2.13)%	 (0.60)%	(1.41)%

Interest Rate	(0.45)	 (0.23)	(0.36)

Equity	(0.64)	 (0.11)	(0.37)

Commodity	(0.52)	    -	(0.33)


Aggregate Value at Risk	(2.31)%	 (1.06)%	(1.67)%





<page>
Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks,
reflect risk reduction due to portfolio diversification or hedging
activities, and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to the following:
*	past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
*	changes in portfolio value caused by market movements may
differ from those of the VaR model;
*	VaR results reflect past market fluctuations applied to
current trading positions while future risk depends on future
positions;
*	VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
*	the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

<page> In addition, the VaR tables above, as well as the past
performance of the Partnership, give no indication of the
Partnership?s potential "risk of ruin".

The VaR tables provided present the results of the Partnership?s
VaR for each of the Partnership?s market risk exposures and on an
aggregate basis at March 31, 2007, and for the four quarter-end
reporting periods from April 1, 2007, through March 31, 2008. VaR
is not necessarily representative of the Partnership?s historic
risk, nor should it be used to predict the Partnership?s future
financial performance or its ability to manage or monitor risk.
There can be no assurance that the Partnership?s actual losses on
a particular day will not exceed the VaR amounts indicated above
or that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances.  These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion of its
available assets in cash at MS&Co.; as of March 31, 2008, such
amount was equal to approximately 97% of the Partnership?s net
asset value.  A decline in short-term interest rates would result
in a decline in the Partnership?s cash management income. This
cash flow risk is not considered to be material.
<page>
Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality, and multiplier features of the Partnership?s market-
sensitive instruments, in relation to the Partnership?s Net
Assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures - constitute
forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act.
The Partnership?s primary market risk exposures, as well as the
strategies used and to be used by Demeter and the Trading Managers
for managing such exposures, are subject to numerous
uncertainties, contingencies and risks, any one of which could
cause the actual results of the Partnership?s risk controls to
differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation, and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies
<page> of the Partnership.  Investors must be prepared to lose all
or substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at March 31, 2008, by market sector.  It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency.  The largest market exposure of the Partnership at March
31, 2008, was to the currency sector.  The Partnership?s currency
exposure is to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs.  Interest rate changes,
as well as political and general economic conditions influence
these fluctuations. At March 31, 2008, the Partnership?s primary
exposure was to outright U.S. dollar positions.  Outright
positions consist of the U.S. dollar vs. other currencies.  These
other currencies include major and minor currencies.  Demeter does
not anticipate that the risk associated with the Partnership?s
currency trades will change significantly in the future.

Interest Rate.  The second largest market exposure of the
Partnership at March 31, 2008, was to the global interest rate
sector.  This exposure was primarily spread across Japanese, U.S.,
and British interest rate sectors. Interest rate movements
directly affect the price of the sovereign bond futures positions
held by the Partnership and indirectly affect the value of its
<page> stock index and currency positions.  Interest rate
movements in one country, as well as relative interest rate
movements between countries, materially impact the Partnership?s
profitability.  The Partnership?s primary interest rate exposure
is generally to interest rate fluctuations in the U.S. and the
other G-7 countries? interest rates.  The G-7 countries consist of
France, the U.S., Britain, Germany, Japan, Italy, and Canada.
Demeter anticipates that the G-7 countries? interest rates will
remain the primary interest rate exposures of the Partnership for
the foreseeable future.  The speculative futures positions held by
the Partnership may range from short to long-term instruments.
Consequently, changes in short, medium, or long-term interest
rates may have an effect on the Partnership.

Equity.  The third largest market exposure of the Partnership at
March 31, 2008, was to the global stock index sector, primarily to
equity price risk in the G-7 countries.  The stock index futures
traded by the Partnership are by law limited to futures on
broadly-based indices.  At March 31, 2008, the Partnership?s
primary exposures were to the TAIWAN (Taiwan), FTSE 100 (United
Kingdom), Euro Stox 50 (Europe), and NASDAQ 100 (U.S.) stock
indices.  The Partnership is primarily exposed to the risk of
adverse price trends or static markets in the U.S., European, and
Asian stock indices.  Static markets would not cause major market
changes, but would make it difficult for the Partnership to avoid
trendless price movements, resulting in numerous small losses.

<page> Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at March 31, 2008:

Foreign Currency Balances.  The Partnership?s primary foreign
currency balances at March 31, 2008, were in the euros,
Japanese yen, Hong Kong dollars, and British pounds. The
Partnership controls the non-trading risk of foreign currency
balances by regularly converting them back into U.S. dollars
upon liquidation of their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Managers, separately, attempt to
manage the risk of the Partnership?s open positions in essentially
the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership?s assets
among different Trading Managers, each of whose strategies focus
on different market sectors and trading approaches, in a multi-
manager Partnership, and by monitoring the performance of the
Trading Managers daily. In addition, the Trading Managers
establish diversification guidelines, often set in terms of the
maximum margin to be committed to positions in any one market
sector or market-sensitive instrument.

Demeter monitors and controls the risk of the Partnership?s non-
trading instrument, cash.  Cash is the only Partnership investment
directed by Demeter, rather than the Trading Managers.
<page>
Item 4.	CONTROLS AND PROCEDURES
As of the end of the period covered by this quarterly report, the
President and Chief Financial Officer of Demeter, the general
partner of the Partnership, have evaluated the effectiveness of
the Partnership?s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), and have
judged such controls and procedures to be effective.

Changes in International Control over Financial Reporting
There have been no material changes during the period covered by
this quarterly report in the Partnership?s internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
of the Exchange Act) or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.

Item 4T.	CONTROLS AND PROCEDURES
Not applicable.



<page> PART II.  OTHER INFORMATION

Item 1A. RISK FACTORS
Information regarding risk factors appears in Item 2.
?Management?s Discussion and Analysis of Financial Condition and
Results of Operations? and Item 3.  ?Quantitative and Qualitative
Disclosures about Market Risk? of this Form 10-Q.  There have been
no other material changes from the risk factors previously
referenced in the Partnership?s Report on Form 10-K for the fiscal
year ended December 31, 2007.

Item 5.  OTHER INFORMATION
Management.  Effective March 20, 2008, Mr. Michael Durbin, age
40, was named a Director of Demeter, subject to approval by the
National Futures Association.  Mr. Durbin is a Managing Director
of Morgan Stanley and has been Chief Operating Officer of
National Sales since February 2008.  Mr. Durbin joined Morgan
Stanley in 1990 and has served in a succession of leadership
positions in both its institutional and wealth management
businesses, most recently as head of Global Wealth Management
Group Capital Markets from October 2007 to February 2008.  Mr.
Durbin also served as Head of Equity Products and Services from
March 2006 to October 2007, Head of International Private Wealth
Management from May 2005 to March 2006, Chief Strategic and Risk
Officer of Global Wealth Management Group from September 2004 to
<page> May 2005, and Chief Administrative Officer of each of
Private Wealth Management and Global Wealth Management Group from
January 2002 to September 2004.  Mr. Durbin received his B.B.A.
from the University of Notre Dame in 1990 and an M.B.A. from the
New York University in 1998.

Effective March 20, 2008, Mr. Jose Morales, age 31, was named a
Director of Demeter, subject to approval by the National Futures
Association.  Mr. Morales is a Vice President at Morgan Stanley
and has headed the Product Development Group for the firm?s
Global Wealth Management business since August 2007.  Mr. Morales
joined the firm in September 1998 as an analyst in the investment
management division, and subsequently held positions in the
Morgan Stanley Investment Management Global Product Development
Group from May 2000 to December 2003, in the Global Wealth
Management Product Development Group from December 2003 to June
2006, and in Global Wealth Management Alternative Investments
Product Development & Management from June 2006 to August 2007.
Mr. Morales is a member of the Global Wealth Management New
Products Committee and the Consulting Services Due Diligence
Committee.  Prior to his appointment as a Director of Demeter,
Mr. Morales served as a member of the Managed Futures Investment
Management Committee from March 2005 to March of 2008.  Mr.
Morales received an M.B.A. with a concentration in Finance from
the NYU Stern School of Business in June 2007 and a B.S. in
<page> International Business Administration with a concentration
in Economics from Fordham University in 1998.

Effective April 1, 2008, Mr. Andrew Saperstein no longer serves
as a Director of Demeter.

Item 6.  EXHIBITS
31.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.

32.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

32.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.



















<page>







SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.




                        Morgan Stanley Cornerstone Fund II L.P.
                        (Registrant)

                        By: Demeter Management Corporation
                            (General Partner)

May 15, 2008            By: /s/Christian Angstadt
                               Christian Angstadt
                               Chief Financial Officer



The General Partner which signed the above is the only party
authorized to act for the Registrant.  The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.











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<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)





DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)



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